You Can Increase Your Savings Interest Rates
If you are like many consumers, chances are you have an extra bit of cash stashed into your checking account for reserve purposes. Not a bad idea if your account pays you a decent interest rate, but few people have checking accounts that even pay them 1% in interest. Therefore you could have a spare five or ten thousand dollars that is barely doing any work for you. There must be a better way for you to increase your savings rate, right? Well, there is. With a little research and some creativity on your part, you can increase your savings rate dramatically without leaving your home. Read on and we'll explore some options available to you. Earning one percent on ten thousand dollars means your account is credited a paltry one hundred dollars per year in interest income. This amount does not keep up with inflation currently running at around 3.5%. On the other hand if your account earned five percent you would stay ahead of inflation even after taxes.
A return of five hundred dollars on your ten thousand dollar investment is possible and you don't have to tie up your funds for the long term. Internet banking has revolutionized the way people conduct business and the interest rate paid on savings accounts and certificates of deposit are much higher than brick and mortar institutions. Granted, you must shop around for the best rates as interest rates are currently all over the map. Still, with a little effort on your part you should find a savings rate of 4.5% or better and a CD rate of 5.5% or better. Banks such as Emigrant Direct and ING Direct offer the best deals going. The beauty of online banking is that you can tie these funds to the bank where your regular checking sits. For example, if the Bank of America is your bank you can keep your savings with ING Direct and move your funds back and forth between the two institutions without charge. So, if your checking account is running low and you want to tap some of your savings, then simply authorize ING Direct to deposit a specified sum of money in your Bank of America account. Of course, many brick and mortar banks are fighting back in the form of higher paying savings accounts. If that is the case with your bank then simply have them link your checking and savings account together, but keep the majority of your funds in the account that pays the highest interest on your funds. |